【正文】 T VALUEd 15. All else constant, the present value of a project increases when:a. the discount rate increases.b. each cash inflow is delayed by one year.c. the initial cost of a project increases.d. the rate of return decreases.e. all cash inflows occur during the last year of a project’s life instead of periodically throughout the life of the project.Difficulty level: EasyNET PRESENT VALUEa 16. The primary reason that pany projects with positive present values are considered acceptable is that:a. they create value for the owners of the firm.b. the project’s rate of return exceeds the rate of inflation.c. they return the initial cash outlay within three years or less.d. the required cash inflows exceed the actual cash inflows.e. the investment’s cost exceeds the present value of the cash inflows.Difficulty level: EasyNET PRESENT VALUEd 17. If a project has a present value equal to zero, then:I. the present value of the cash inflows exceeds the initial cost of the project.II. the project produces a rate of return that just equals the rate required to accept the project.III. the project is expected to produce only the minimally required cash inflows.IV. any delay in receiving the projected cash inflows will cause the project to have a negative present value.a. II and III onlyb. II and IV onlyc. I, II, and IV onlyd. II, III, and IV onlye. I, II, and III onlyDifficulty level: MediumNET PRESENT VALUEb 18. Net present value:a. cannot be used when deciding between two mutually exclusive projects.b. is more useful to decision makers than the internal rate of return when paring different sized projects.c. is easy to explain to nonfinancial managers and thus is the primary method of analysis used by the lowest levels of management.d. is not an as widely used tool as payback and discounted paybacke. is very similar in its methodology to the average accounting return.Difficulty level: EasyPAYBACKc 19. Payback is frequently used to analyze independent projects because:a. it considers the time value of money.b. all relevant cash flows are included in the analysis.c. it is easy and quick to calculate.d. it is the most desirable of all the available analytical methods from a financial perspective.e. it produces better decisions than those made using either NPV or IRR.Difficulty level: EasyPAYBACKc 20. The advantages of the payback method of project analysis include the:I. application of a discount rate to each separate cash flow.II. bias towards liquidity.III. ease of use.IV. arbitrary cutoff point.a. I and II onlyb. I and III onlyc. II and III onlyd. II and IV onlye. II, III, and IV onlyDifficulty level: MediumPAYBACKd 21. All else equal, the payback period for a project will decrease whenever the:a. initial cost increases.b. required return for a project increases.c. assigned discount rate decreases.d. cash inflows are moved forward in time.e. duration of a project is lengthened.Difficulty level: MediumDISCOUNTED PAYBACKd 22. The discounted payback period of a project will decrease whenever the:a. discount rate applied to the project is increased.b. initial cash outlay of the project is increased.c. time period of the project is increased.d. amount of each project cash flow is increased.e. costs of the fixed assets utilized in the project increase.Difficulty level: MediumDISCOUNTED PAYBACKa 23. The discounted payback rule may cause:a. some positive present value projects to be rejected.b. the most liquid projects to be rejected in favor of less liquid projects.c. projects to be incorrectly accepted due to ignoring the time value of money.d. projects with negative present values to be accepted.e. some projects to be accepted which would otherwise be rejected under the payback rule.Difficulty level: EasyINTERNAL RATE OF RETURNb 24. The internal rate of return (IRR):I. rule states that a project with an IRR that is less than the required rate should be accepted.II. is the rate generated solely by the cash flows of an investment.III. is the rate that causes the present value of a project to exactly equal zero.IV. can effectively be used to analyze all investment scenarios.a. I and IV onlyb. II and III onlyc. I, II, and III onlyd. II, III, and IV onlye. I, II, III, and IVDifficulty level: MediumINTERNAL RATE OF RETURNa 25. The internal rate of return for a project will increase if:a. the initial cost of the project can be reduced.b. the total amount of the cash inflows is reduced.c. each cash inflow is moved such that it occurs one year later than originally projected.d. the required rate of return is reduced.e. the salvage value of the project is omitted from the analysis.Difficulty level: MediumINTERNAL RATE OF RETURNc 26. The internal rate of return is:a. more reliable as a decision making tool than present value whenever you are considering mutually exclusive projects.b. equivalent to the discount rate that makes the present value equal to one.c. difficult to pute without the use of either a financial calculator or a puter.d. dependent upon the interest rates offered in the marketplace.e. a better methodology than present value when dealing with unconventional cash flows.Difficulty level: MediumINTERNAL RATE OF RETURNa 27. The internal rate of return tends to be:a. easier for managers to prehend than the present value.b. extremely accurate even when cash flow estimates are faulty.c. ignored by most financial analysts.d. used primarily to differentiate between mutually exclusive projects.e. utilized in project analysis only when multiple present values apply.Difficulty level: EasyINCREMENTAL INTERNAL RATE OF RETURNe 28. You are trying to determine whether to accept project A or project B. These projects are mutually exclusive